Natixis survey: Advisers expect pension pot splurge surge

More than half of advisers expect more people to squander their pensions once the new retirement freedoms come into force, a Natixis Global Asset Management survey shows.

The French asset management house canvassed 300 UK financial advisers and found 57 per cent thought the ability to withdraw their entire pot immediately would tempt more Britons to splurge their pot irresponsibly.

However, almost three-quarters of the advisers believed they will be in greater demand following the pension changes.

Although, the ability to offer that advice – as well as the breadth of clients they can economically service – has taken a hit since the RDR, the survey shows.

Natixis executive vice president of UK retail and international product Chris Jackson says the Government and the financial community have a “serious responsibility” to ensure people set realistic retirement goals and work to meet them

“It is clear that many investors feel ill-equipped to make sure they have a comfortable retirement,” he says.

“Investors must have more support to understand what investments or further savings they need to meet their retirement income goals. The best way to do this is to work closely with a professional financial adviser.”

Nearly a third of advisers said the regulatory reformation forced them to change the threshold of assets needed to make a client viable, “despite their advice being more crucial than ever”, Natixis says.

An ancillary survey of 750 UK investors reinforces the likelihood of greater business for advisers. It found more than half of the investors had no financial goals, while a third had no clue about the income they might need for retirement.

Almost 80 per cent confessed to having weak investment knowledge, with just less than half having inadequate knowledge of stable income providers.

Jackson says the Government’s “guidance guarantee” was a good start, but its failure is that it will not be personally tailored to investors.

“While the guidance guarantee is an encouraging first step towards bridging the advice gap, there is no real substitute for genuine financial advice,” he adds.

“The Government-sponsored guidance is unregulated and ‘off-the-shelf’, and will merely serve to help investors narrow their list of options rather than define a way forward based on their individual circumstances.”

The survey of advisers was conducted in June and July by CoreData as part of a global report.